Finance hub Mauritius to have first retail Islamic bank soon
For Mauritius, which already enjoys the status of a finance hub for Africa, this presents a golden opportunity to showcase diversity in its financial offerings by adding a suite of Islamic banking services. (Image: Gulf Business)
Mauritius is delving deeper into Islamic banking with its first retail Islamic bank slated to be set up soon under an agreement between Ethical Finance Limited (EFL) and Meezan Bank, Pakistan’s first and largest Islamic Bank.
Recently chosen to host the 11th summit of the Islamic Financial Services Board (IFSB), the island economy looks set to become the Islamic banking hub for Sub-Saharan Africa.
For Mauritius, which already enjoys the status of a finance hub for Africa, this presents a golden opportunity to showcase diversity in its financial offerings by adding a suite of Islamic banking services. In the region, Islamic banking is already present in Maghreb, Sudan, Nigeria, Kenya, Uganda and South Africa.
Moreover, for the island economy – moving towards freeing customers from mounting piles of interest by implementing the “in duplume” rule that prevents banks from charging interest on interest – the move towards Islamic banking is another step in the right direction. It may be noted that, under Islamic banking, interest rates cannot be excessive and there are no additional penalties for late payment, as this is forbidden by the Shariah principles that govern Islamic banks.
Ethical Finance Limited (EFL), a limited liability company, has been set up in Mauritius for founding the island’s first retail Islamic bank, and has entered into an agreement with Meezan Bank towards achieving this objective.
The agreement enjoins upon Meezan Bank to share with EFL its knowledge, skills and experience in the expert field of Islamic banking. Product development, Shariah controls, training and other Shari’ah related technical services and support are covered under the scope of the agreement.
The agreement was signed by Irfan Siddiqui, President and CEO, and Ariful Islam, Deputy CEO, on behalf of Meezan Bank while EFL was represented directors Ismael I Bahemia and Osman Rajack.
This agreement reiterates Meezan Bank’s commitment towards its vision of establishing Islamic banking as a preferred banking option globally. In 2011-12, Meezan Bank had provided expert assistance for expanding Islamic banking services in Sri Lanka vide the Amana Bank.
Meanwhile, at the fifth World Islamic Retail Banking Conference held in Dubai on Tuesday, top executives of leading Islamic banks highlighted that unlike conventional banking, Islamic banking does not pile up “toxic loans” or “bad debt”. Wasim Saifi, global head of Islamic Consumer Banking of Standard Chartered Bank, highlighted that substantial opportunities exist in East and West Africa and that the next decade is very important indeed for the industry.